BP's Group Chief Executive Lord Browne gave a speech this week about the global energy challenges and the company's philosophy of sustainability. While it is very encouraging for an energy powerhouse to be unequivocally addressing climate change, the company must follow through on its current commitments to alternative energy and protect the environment by properly managing its fossil fuel assets.

Here are excerpts and my thoughts on his speech. (You can read the full text here).

Browne says companies don't only exist to make money -- "the purpose is to supply the goods and services which people want to buy at a cost they can afford... Business is about meeting customer needs again and again over a long period of time and building a relationship which enables the business to respond as the needs change."

"You have to examine the things which threaten the sustainability of the relationship. And in a spirit of mutual advantage you have to examine what you can do, as a business, to remove those threats. To make the relationship sustainable. To ensure one transaction leads to another, and another.

From BP's perspective, the biggest risks to sustainability are:

"The first and most important is climate change and the potential impact of hydrocarbons – including oil and gas - in increasing the level of carbon in the earth’s atmosphere and potentially creating a fundamental and irreversible shift in the world’s climate.... I believe the judgment on the science of climate change on the basis of the available evidence is now beyond reasonable contradiction.

.... To do nothing, to live in denial, to pass the problem to another generation – will increase the cost of the action and will increase the risk that the action comes too late."

These words are striking coming from a company that gets the majority of its revenue from fossil fuels.

"The second threat to sustainability is that the energy resources the world needs will cease to be available and that energy shortage, perhaps expressed in very high prices, will hinder economic growth and reduce living standards. This shortage could force us into using whatever resources are available regardless of the environmental consequences.

Sustainability is attainable. The risks are significant but there are things we can do. The complexity lies in the fact that no one player, no single part of society, can achieve sustainability by acting alone.

Browne also seems to be suggesting a carbon tax:

"Climate change for instance requires the pricing of emissions and their consequences if the right economic decisions are going to be taken."

He compares the struggle to become sustainable to fighting World War II:

"Freeing the world from tyranny and from the threat of fascism 60 years ago imposed a very high immediate cost – much higher than the 1 per cent of GDP..."

BP just announced that it will nearly double the size of its solar production plant in Frederick, MD, to 150 MW. BP will upgrade the facility through sustainable business practices, including adding roof garden, extensive water recycling, and the utilization of LEED (Leadership in Energy and Environmental Design) design components.

Browne said later this year the company will announce a $500 million research project for converting biomass into ethanol.

While these are positive strides, the company has many challenges in living up to its high ideals.